Japan:Mazda's U.S. incentives exceed plans
By Detroit News staff reports, Bloomberg News and wire services
TOKYO -- Mazda Motor Corp. is spending more than it planned on incentives such as rebates and no-interest loans in the U.S. to compete with bigger rivals such as General Motors Corp., Chief Financial Officer Gideon Wolthers said.
The automaker, a third-owned by Ford Motor Co., is spending "slightly" more than last year's average of "over $2,000" per vehicle, Wolthers said without specifying the actual level. The Hiroshima, Japan-based company said in April it plans to keep average incentives below $2,000 per vehicle this business year.
"Incentive levels in the industry have been higher than I think everybody initially anticipated," Wolthers said in a telephone interview. The release of the RX-8 sports car in the second half will help boost unit sales and "should favorably influence the average level of incentives we offer," he said.
Since Mazda has only 1.5 percent of the U.S. market, it's forced to follow suit as bigger rivals such as General Motors raise incentive spending to record levels to boost sales. Mazda has also been trying to reduce U.S. inventories from double the industry average, suspending production of the new Mazda6 sedan after failing to meet initial sales goals for the model.
General Motors spent an average $3,994 per vehicle on rebates and no-interest loans in the U.S. in July, more than any other automaker. Rival Ford Motor Co. spent $3,986 per vehicle.
Mazda, Japan's fifth-largest carmaker, is countering a 6 percent drop in U.S. sales from January to July by tapping surging demand in Europe, where profit is inflated by a weaker yen against the euro.
The tougher U.S. market "is definitely a concern," for Mazda, said Kerry Goh, who helps manage the equivalent of $11 billion outside the U.S. for AIB Govett (Asia) Ltd. in Singapore, including Mazda shares. "The biggest driver for Mazda right now should be Europe, given the currency situation and their reputation."
Mazda's European sales between January and June surged 33 percent to 115,750 units. The company plans to sell 220,000 vehicles there in 2003, a 21 percent gain.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....